Govt to acquire Australian radar manufacturer for $500m

Brandon How

The federal government will spend almost $500 million to take majority ownership in Canberra-based military radar manufacturer CEA Technologies, a provider of “critical sovereign capability” to the Royal Australian Navy.

From July 2023, the government will hold a non-controlling shareholding in CEA for 18 months, Defence minister Richard Marles, Finance minister Katy Gallagher, and Defence Industry minister Pat Conroy announced on Thursday.

The deal, which understands is worth around $500 million, will eventually lead to majority ownership and the creation of a new Government Business Enterprise.

CEA’s CEAFAR Phased Array Radar on board an Anzac-Class frigate. Image:

The government is expected to hold 72 per cent of the shares, with the remaining 28 per cent to be held by a single entity controlled by the founders of CEA Technologies, understands.

A spokesperson for Finance minister Katy Gallagher said the deal has been two to three years in the making, having been initiated by the former Coalition government.

CEA will operate as a “an independent for-profit company at arms-length from government” and is not expected to have any impact on Department of Defence procurement decisions.

“It is expected that as a GBE, CEA will continue to participate in the defence industry and pursue commercial, including export, opportunities,” the statement reads.

Mr Conroy described CEA as a “an Australian manufacturing powerhouse” that provides critical capabilities to naval surface combatants, among other projects.

“The phased array radar capabilities within CEA are a critical sovereign capability and today’s agreement protects the incredible capability of the CEA workforce and their unmatched ability in the field of radar technologies,” he said.

CEA was awarded a $277 million contract in February to deliver electronic warfare capabilities for Royal Australian Air Force fighter jets as part of AIR5349 Phase 6, also known as the Advanced Growler Airborne Electronic Attack Capability.

The ministers’ statement said the agreement will give existing 600 staff and investors of the company, which was founded 40 years ago, “certainty and clarity about the future”.

It also notes that it will help “preserve the culture of innovation to pursue commercial opportunities and further develop the technology, whilst maintaining a strong focus on national security”.

Mr Marles said the “landmark agreement” will ensure the company can “meet the ongoing needs of Australia and its international partners”, while Ms Gallagher said it would keep “Australians safe while achieving value for the taxpayer”.

Shadow defence minister Andrew Hastie and shadow finance minister Senator Jane Hume welcomed the announcement, which they said “continues the important preparatory work undertaken by the former Coalition government”.

The shadow ministers said it is in the national interest to increase Australia’s domestic defence manufacturing capabilities and committed to a “bipartisan approach to the establishment of this new Government Business Enterprise”.

“The Coalition is seeking briefings and further information on this announcement, including the cost and impact on the Budget, as well as the details surrounding the proposed timeline, structure, and governance of the staged acquisition and the new Government Business Enterprise,” they said.

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